The Australian Prudential Regulation Authority (APRA) has issued a consultation paper proposing modifications to the capital framework for annuities, aiming to permit reduced capital requirements for annuity products where life insurers enhance risk management practices. Under the proposal, capital relief would be linked to measures including closer matching of assets and liabilities. APRA frames the changes as a response to industry requests to better align Australian requirements with those in other jurisdictions, with the stated aim of supporting more competitively priced annuities without unduly increasing risks to policyholders. Written submissions are due by 25 July 2025.
Australian Prudential Regulation Authority 2025-06-12
Australian Prudential Regulation Authority consults on lowering annuity capital requirements in exchange for stronger life insurer risk management
The Australian Prudential Regulation Authority (APRA) has released a consultation paper proposing changes to the capital framework for annuities, allowing reduced capital requirements for life insurers that improve risk management. The proposal links capital relief to measures like closer asset-liability matching and aims to align Australian requirements with international standards, supporting competitively priced annuities without increasing risks to policyholders.